Infosys, India’s second-largest software services company, has reported a 20.5% rise in year-on-year profit for the second quarter, helped by growth in client demand for its new-age digital services during the Covid-19 pandemic.
The Bangalore-based company has bucked the trend as its rivals Tata Consultancy Services and Wipro had earlier reported a drop in Q2 net profit when compared with last year.
For the quarter ended September 30, the information technology major reported a profit of 48.45 billion rupees (US$ 661 million). It had posted a profit of 40.19 billion rupees in the year-ago period. On a sequential basis, profit grew 14.45%.
The consolidated revenue from operations for this quarter increased by 245.70 billion rupees ($3.35 million), up 8.6% from the year-ago quarter. Infosys’s operating profit rose 26.8% to 62.28 billion rupees ($850 million) from last year.
Infosys CEO Salil Parekh said, “Our second-quarter performance is a clear reflection of our ability to help clients on their digital transformation journeys. Our digital and cloud capabilities combined with intense client relevance are helping us achieve differentiated results in the market.” He pointed out that the growth from digital offerings such as cloud, data and analytics was 25.4% and comprises 47.3% of the revenue. Chief Operating Officer Pravin Rao said the total contract value of the deals made this quarter was the highest ever at US$3.15 billion.
The company is banking strongly on inorganic growth to boost its digital business and made four acquisitions this year – cloud firm Simplus, product design firm Kaleidoscope Innovation, enterprise service management consultancy GuideVision, and digital customer experience and analytics firm Blue Acorn iCi.
Infosys raised its FY21 revenue growth guidance to 2%-3% in constant currency from the earlier projection of 0-2%. It also revised upwards its FY21 operating margin guidance to 23%-24%. The software major has declared an interim dividend of 12 rupees per equity share and fixed October 26 as the record date and November 11 as the payment date.
Effective from January 1, Infosys will roll out salary increases and promotions across all levels. The company also said it is giving 100% variable pay along with a special incentive for the second quarter.
Infosys has a headcount of over 240,000 and its voluntary attrition for IT services declined in the September quarter to 7.8% from 18.3% last year.